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Lax v. Design Quest N.Y., Ltd.

Supreme Court, New York, County

August 14, 2013

SUSAN and STEVEN LAX, Plaintiffs,
v.
DESIGN QUEST N.Y., LTD., RICHARD RUBENS, and BARBARA RUBENS, Defendants. Index No. 105299/11

Unpublished Opinion

Motion Date 08-07-2013

MANUEL J. MENPEZ Justice.

Upon a reading of the foregoing cited papers, it is Ordered that defendants' motion pursuant to CPLR §2221 [e] seeking to renew and reargue their prior motion to dismiss the complaint, and to dismiss plaintiff's third cause of action for unjust enrichment, is denied. Plaintiff's motion to enter a default judgment on the second and third cause of action asserted in the amended complaint, is denied.

Defendants seek an Order pursuant to CPLR 2221 [e] seeking leave to renew and reargue their motion to dismiss the complaint pursuant to CPLR § 3211 [a][7] for failure to properly state a cause of action and CPLR §3016[b], for failure to allege their claims of fraud. Pursuant to CPLR § 3211[a][1], [7] defendants also seek to dismiss plaintiff's third cause of action for unjust enrichment based on the existence of an enforceable written contract. Alternatively, defendants seek an extension of time to serve and file an answer to the amended complaint.

Plaintiffs oppose the motion and cross-move to enter a default judgment against the defendants on the first cause of action for breach of contract and second causes of action for fraudulent billing asserted in the amended complaint and for sanctions based on frivolous practice. Plaintiffs do not seek to obtain a judgment on their third cause of action for unjust enrichment.

Defendants motion to dismiss was previously granted by this Court's Decision and Order entered on January 25, 2012 (Mot. Exh. B). Plaintiffs appealed and on December 6, 2012, the Appellate Division, First Department modified the decision, reinstating plaintiff's claim for breach of contract and allowing the re-pleading of the cause of action for fraudulent billing (Cross-Mot. Exh. 5).

The resolution of an issue by the appellate court on a prior appeal is, "law of the case and is binding on the Supreme Court as well as the appellate court." No further examination of the issues can be made without a showing of subsequent evidence or a change in the law (Board of Managers of the 25 Charles Street Condominium v. Seligson, 106 A.D.3d 130, 961 N.Y.S.2d 152 [N.Y.A.D. 1st Dept., 2013] citing to J-Mar Serv. Ctr., Inc. v. Mahoney, Connor & Hussey, 45 A.D.3d 809, 847 N.Y.S.2d 130 N.Y.A.D. 2nd Dept., 2007]).

Defendants are seeking to renew a motion to dismiss that was based on the complaint before it was modified, and apply it to the Amended Complaint. The December 6, 2012 decision of the Appellate Division, First Department, is law of the case. Defendants arguments were previously made before the Appellate Division and rely on documentation that existed at the time of the motion and appeal, but was not produced. Defendants have not established the existence of subsequent evidence or a change in the law. There is no basis to renew the prior motion to dismiss before this Court.

A motion to dismiss pursuant to CPLR §3211[a][1], requires that the party seeking dismissal produce documentary evidence that "utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law." Dismissal pursuant to CPLR §3211[a][7], requires a reading of the pleadings to determine whether a legally recognizable cause of action can be identified and it is properly pled. A cause of action does not have to be skillfully prepared but it does have to present facts so that it can be identified and establish a potentially meritorious claim (Leon v. Martinez, 84 N.Y.2d 83, 84 N.Y.2d 83, 614 N.Y.S., 2d 972, 638 N.E.2d 511 [1994]).

Unjust enrichment is a quasi-contract claim that only applies in the absence of an express written agreement (Zolotar v. New York Life Ins. Co., 172 A.D.2d 27, 576 A.D.2d 850 [N.Y.A.D. 1st Dept., 1991]). A party is not precluded from asserting both breach of contract and quasi-contract causes of action when there is a, "bona fide dispute as to the existence of a contract or the contract does not cover the dispute in issue"(Joseph Sternberg, Inc. v. Walber 36th Street Associates, 187 A.D.2d 225, 594 N.Y.S.2d 144 [N.Y.A.D. 1st Dept., 1993]). Plaintiff may assert a claim for both breach of contract and for unjust enrichment where the defendant prevented performance of a written agreement or money is owed outside the scope of the agreement (Loheac, P.C. v. Children's Corner Learning Center, 51 A.D.3d 476, 857 N.Y.S.2d 143 [N.Y.A.D. 1st Dept., 2008]).

Defendants seek to dismiss the third cause of action for unjust enrichment asserted for the first time in the amended complaint, because of the existence of the written agreement. The Appellate Division, First Department determined that there was a potential oral contract modifying the written agreement. The oral modification is the basis for the first cause of action for breach of contract. There is a basis for plaintiff's third cause of action for unjust enrichment, the money alleged to be owed may be outside scope of the oral modification. The documentation submitted by defendants does not utterly refute the potential basis for the cause of action.

Plaintiffs served the amended complaint on January 21. 2013 and by stipulation extended defendants' time to answer until April 4, 2013. Defendants' attorneys then moved to be relieved as counsel. On April 3, 2013, this Court granted the motion and stayed the action for forty-five (45) days (Mot. Exh. E). Defendants' new counsel made this motion, without serving an answer to the amended complaint.

A timely motion to dismiss a cause of action, "..extended the time to respond to other causes of action as well." (Chagnon v. Tyson, 11 A.D.3d 325, 783 N.Y.S.2d 29 [N.Y.A.D. 1st Dept., 2004] and De Falco v. JRS Confectionary, 118 ...


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